The nation is hanging with fear. Walmart reports that Christmas spending will be down significantly among its customers. Businesses continue to put off hiring and investing because of the uncertain tax future.
Though most of the public debate has focused on tax rates for the highest earners, the “cliff” is more complex than that. (Joe Carter gives a full account.) On Jan. 1, the Bush tax cuts are set to expire along with President Obama’s stimulus measures that cut various tax credits and payroll taxes. As a result of the last debt ceiling negotiations, automatic cuts in defense and discretionary spending will also kick in. The result is a massive kick in the gut to the economy and, more concretely, to everyone who pays taxes or benefits from tax credits. The Heritage Foundation calculates that taxes for the average family will go up approximately $4,100.
The larger crisis is our massive and growing entitlements spending. In 1950, there were 16 workers for every beneficiary in the Social Security system. Today the worker to beneficiary ratio is 3:1. The baby boom generation, that enormous demographic bubble, has started retiring and will bankrupt us with Social Security and Medicare obligations as they stand. Adding to the crisis is our national debt of $16 trillion and rising. Last year alone we added $1.3 trillion.
This shadow hangs over more than just individual families who foresee evaporating income and perhaps also their jobs. Americans give generously to charity, but giving has been down these last four years because of tightening means and a threatening future. Churches and Christian organizations have not been spared this trend. If our lawmakers in Washington include any kind of cap on charitable giving as part of a revenue-maximizing compromise, it could be devastating to what Americans do best: organizing themselves in private associations to do the work of helping each other. Christians are especially active in this work, including colleges, hospitals, and organizations serving the poor, children, distressed women, at-risk men, and innumerable other human needs. Churches themselves do irreplaceable work keeping families together and healthy. Cutbacks on these fronts will add budgetary stress to government services that do a much poorer job of addressing these needs.
The question for Christians is: Do we give to Christ’s church and His work because the government incentivizes us with tax write-offs, because the government subsidizes us? Or do we support the work of the church because we love and obey the Lord of the church and are committed to her work? Do we support the work of Christ in the world with whatever the government lets us keep, and then only provided that it doesn’t cut into higher priorities like vacations, electronics, and fashion? Or is it a Christian priority?
Paul writes that the Macedonian church gave generously out of their “extreme poverty” (2 Corinthians 8). If political impasse restricts what Christians have for giving, it will be an opportunity for Christians to glorify God by trusting Him with truly faith-based giving.